Will Tax Bill Put More Money In Your Pocket?

You probably heard about the GOP Tax Bill, but it is finally starting to kick in. I generally avoid talking politics, so I will not focus on the partisan connotations of this bill, but I will discuss how it might impact you.  This bill is far from perfect, but tax reform was desperately needed to compete on the global stage.

I recently looked at my pay stub and noticed I am getting more of my money back! Yes, I have noticed an increase by $57.37 a month (I get paid once a month). That is an extra $688.44 a year that I will get to keep. If you make 10 or 12 dollars an hour, for example, you will probably get to keep an extra 8 or 10 dollars in your paycheck ever two weeks. I know that is not a lot of money, but it is something. We are still waiting to see how much my wife’s paycheck will be. Most should see an increase in their checks by February, so I would be watching closely.

Obviously, the more money you make the bigger return you will see. One of the arguments is that this tax bill favors the rich. My question is what does not favor the rich. The old saying “the rich get richer the poor get poorer.” I generally do not complain when I benefit from a particular policy. I am under no illusions about this tax bill. There will always be winners and losers when it comes to legislation.

Our tax rate last year was 25% and it looks like it will be 22% next year. I typically always have to pay in because of capital gains. Between the interest from our CD, dividend income and capital gains we made around $31,000 last year. I sold a lot of stock last year and we ended up paying over $6,000 to the government, so if I can get any type of relief I will welcome it. The Child Tax Credit is also going up a little, so I am happy about that since my family is growing. Once again, I will take any relief I can!

The tax bill also drastically cut the corporate rate from 35% to 21%. I personally believe that is good for business. We have heard several big corporations giving their employees bonuses or pay raises. One of the criticisms was these companies would use profits from the tax cut by offering stock buybacks and dividend increases. I actually see this as good for investors. I own a lot of stock, so stock buybacks and increase dividends  are great for me. If you do not own stock, you are probably not going to benefit.

Another benefit is the individual mandate for the Affordable Care Act (Obamacare) is gone. You are no longer penalized for not having healthcare insurance. I am glad they eliminated this part of Affordable Care Act, but Congress needs to get their act together and fix this broken system. Neither party seems willing or capable of addressing this issue. What lawmakers have done with our healthcare system is truly a national shame. I can only hope that one day we can live in a society where people are treated with dignity. No one should have to go bankrupt because of medical issues.

In the end, the GOP Tax Bill is far from perfect, but if it puts a little more money in my pocket and helps businesses compete, I will  take it. Obviously, there will be winners and losers  with any major piece of legislation. I think we need Congress to address our healthcare system, immigration system and our crumbling infrastructure. Perhaps I am asking too much, but I will give credit in regards to this latest tax reform. I will always support measures to put more money into the pockets of middle-class citizens and even those at the top. I strive to be there one day. Fingers crossed!

What are your thoughts on the tax bill? Are you seeing any benefits?

6 thoughts on “Will Tax Bill Put More Money In Your Pocket?”

  1. My marginal tax rate is going from 25% to 22% as well! I’ve been fidgeting with my w4 numbers too much recently to know if my paycheck will really be bigger, but I suspect it is.

    1. It is still early. I am sure by next month you will see the difference in your paycheck. Now we are just waiting to see how much my wife’s check is. We make about the same, so it should be close to my increase. Thanks for the comment.

  2. OPP, You tackle a lot here and I will avoid politics as well. However, I would add to your list of things our government needs to tackle: one being the solvency of social security. It seems this has been pushed to the back burner since George W Bush in his second term tried, but couldn’t get anything done with it. Obama ignored it and it looks like Trump is too. Tom

    1. I agree. Social Security needs to be addressed, but past and our current president, along with Congress have not tackled this issue. A lot of people rely on this program. I have been saving like crazy because I can’t bet on Social Security to take care of me during those golden years. Thanks for the comment.

  3. I’m not thrilled with the new tax law. I know that a few years down the line, I’m actually going to get screwed and pay even more taxes. I’m in that $12/hour bracket, and so far haven’t seen much of a change. I think my taxes on my income might have been 19% before, and now it’s 18.7%. Wow, I’ll try to not spend all of that difference in one place, like on a package of crackers. 🙁

    I thought my tax bracket was supposed to decrease to 15% but so far haven’t seen it.

    Like you, I’m trying to save as much as possible, while still trying to live on a meager income. So freelance/side-hustle work it is for me!

    1. It seems that the more you make, the better you come out. Those freelance/side-hustles are the way to go. No one works harder. Keep fighting!

Leave a Reply

Your email address will not be published. Required fields are marked *